Editing Long Depression (section)

==Causes of the crisis==
{{main article|Panic of 1873}}

[[File:Panic of 1873 bank run.jpg|thumb|300px|[[Bank run|Run]] on the Fourth National Bank, No. 20 Nassau Street, New York City, 1873. From ''Frank Leslie's Illustrated Newspaper'', October&nbsp;4, 1873.]]

In 1873, during a decline in the value of silver{{snd}}exacerbated by the end of the German Empire's production of ''[[thaler]]'' coins{{snd}}the US government passed the [[Coinage Act of 1873]] in April. This essentially ended the [[bimetallic standard]] of the United States, forcing it for the first time onto a pure [[gold standard]]. This measure, referred to by its opponents as "the Crime of 1873" and the topic of [[William Jennings Bryan]]'s [[Cross of Gold speech]] in 1896, forced a contraction of the [[money supply]] in the United States. It also drove down silver prices further, even as new silver mines were being established in [[Nevada]], which stimulated mining investment but increased supply as demand was falling.<ref>{{cite book |last=Loomis |first=Noel M.
 |year=1968 |title=Wells Fargo }} pp. 219–220, 224–225.</ref> Silver miners arrived at US mints, unaware of the ban on production of silver coins, only to find their product no longer welcome. By September, the US economy was in a crisis, deflation causing banking panics and destabilizing business investment, climaxing in the [[Panic of 1873]].

The Panic of 1873 has been described as "the first truly international crisis".<ref name="cycles-4"/>{{rp|p=132}} The optimism that had been driving booming stock prices in central Europe had reached a fever pitch, and fears of a bubble culminated in a panic in [[Vienna]] beginning in April 1873. The collapse of the [[Wiener Börse|Vienna Stock Exchange]] began on May 8, 1873, and continued until May 10, when the exchange was closed; when it was reopened three days later, the panic seemed to have faded, and appeared confined to [[Austria-Hungary]].<ref name="cycles-4"/>{{pn|date=January 2022}} Financial panic arrived in the Americas only months later on [[Black Thursday]], September 18, 1873, after the failure of the banking house of [[Jay Cooke]] and Company over the [[Northern Pacific Railway]].<ref name="titan-1"/> The Northern Pacific railway had been given {{convert|40|e6acre|km2}} of public land in the Western United States and Cooke sought $100,000,000 in capital for the company; the bank failed when the bond issue proved unsalable, and was shortly followed by several other major banks. The [[New York Stock Exchange]] closed for ten days on September 20.<ref name="cycles-4"/>{{rp|p=132}}

The [[financial contagion]] then returned to Europe, provoking a second panic in Vienna and further failures in continental Europe before receding. France, which had been experiencing deflation in the years preceding the crash, was spared financial calamity for the moment, as was the United Kingdom.<ref name="cycles-4"/>{{rp|p=133}}

Some{{who?|date=January 2022}} have argued the depression was rooted in the 1870 [[Franco-Prussian War]] that devastated the French economy and, under the [[Treaty of Frankfurt (1871)|Treaty of Frankfurt]], forced that country to make large [[war reparations]] payments to Germany. The primary cause of the price depression in the United States was the tight monetary policy that the United States followed to get back to the [[gold standard]] after the [[American Civil War|Civil War]]. The U.S. government was taking money out of circulation to achieve this goal, therefore there was less available money to facilitate trade.  Because of this monetary policy the [[price of silver]] started to fall causing considerable losses of asset values; by most accounts, after 1879 production was growing, thus further putting downward pressure on prices due to increased industrial productivity, trade and competition.

In the US the speculative nature of financing due to both the [[Demand Note|greenback]], which was paper currency issued to pay for the Civil War and rampant fraud in the building of the [[Union Pacific Railway]] up to 1869 culminated in the [[Crédit Mobilier scandal]]. Railway overbuilding and weak markets collapsed the bubble in 1873. Both the Union Pacific and the Northern Pacific lines were central to the collapse; another railway bubble was the [[Railway Mania]] in the United Kingdom.

Because of the Panic of 1873, governments [[fixed exchange rate|depegged]] their currencies, to save money. The demonetization of silver by European and North American governments in the early 1870s was certainly a contributing factor. The US [[Coinage Act of 1873]] was met with great opposition by farmers and miners, as silver was seen as more of a monetary benefit to rural areas than to banks in big cities. In addition, there were US citizens who advocated the continuance of government-issued [[fiat money]] ([[United States Note]]s) to avoid deflation and promote exports. The western US states were outraged{{snd}}[[Nevada]], [[Colorado]], and [[Idaho]] were huge silver producers with productive mines, and for a few years mining abated.  Resumption of silver dollar coinage was authorized by the [[Bland–Allison Act]] of 1878.  The resumption of the US government buying silver was enacted in 1890 with the [[Sherman Silver Purchase Act]].

[[Monetarist]]s believe that the 1873 depression was caused by shortages of gold that undermined the gold standard, and that the 1848 [[California Gold Rush]], 1886 [[Witwatersrand Gold Rush]] in South Africa and the 1896–99 [[Klondike Gold Rush]] helped alleviate such crises. Other analyses have pointed to developmental surges (see [[Kondratiev wave]]), theorizing that the [[Second Industrial Revolution]] was causing large shifts in the economies of many states, imposing transition costs, which may also have played a role in causing the depression.